By Canadian Press

Ford restructuring to cost 12,000 jobs in Europe

Jun 27, 2019 | 10:41 AM

FRANKFURT — Carmaker Ford said Thursday it is shedding 12,000 jobs in Europe to increase profitability, part of a global trend of cost cuts by automakers facing shifting consumer tastes and heavy investments in electric cars.

The job losses amount to about a fifth of Ford’s work force in Europe and are part of a broad restructuring that includes the previously announced closure of six plants. Ford is reducing its total number of plants in the region to 18.

The company said that the positions would be eliminated mostly through voluntary agreements through the end of 2020. Some 2,000 of the cuts will be salaried positions, part of 7,000 white collar jobs being shed as part of a global restructuring by the Ford Motor Co., which is based in Dearborn, Michigan.

“Separating employees and closing plants are the hardest decisions we make,” said Ford of Europe President Stuart Rowley.

He said the company was “providing support to ease the impact.”

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The figure of 12,000 job losses includes some that have already been announced, such as 1,700 from the proposed closing of the engine plant in Bridgend, Wales. Ford is also closing a plant in France, three in Russia, and is selling another in Slovakia.

The losses come from among the 56,000 people employed on salaried, hourly and agency bases by Ford of Europe as of last year.

Ford of Europe, based in Cologne, Germany, said it hopes to “significantly improve” its financial results, after losing $398 million in 2018. Rowley told reporters on a conference call that financials would improve this year but stopped short of predicting a full-year profit.

Ford and other global automakers are facing multiple challenges, including the expensive push to develop electric cars that will help them meet new emission rules in Europe and comply with regulations favouring alternative energy vehicles in China. They need strong profits to fund those investments. Ford of Europe said all its new vehicles would come with an electric variant, such as a battery or battery-internal combustion hybrid, and that it would build a future family of electric vehicles in Europe.

Carmakers are also adapting to a shift in consumer demand to SUVs and to weaker demand for more traditional configurations such as sedans and hatchbacks. Longer-term challenges include the development of autonomous vehicles. Ford is in talks with Volkswagen about possibly developing self-driving cars together.

General Motors said in November that it would lay off 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric technology. Daimler, maker of Mercedes-Benz cars, is working on a cost-cutting program under new CEO Ola Kallenius, while Volkswagen said in March it would eliminate up to 7,000 jobs by 2023. That’s on top of a 2016 job reduction agreement that foresaw the loss of 23,000 jobs through 2020, and the addition of 9,000 through new technology.

David McHugh, The Associated Press